The Wall Street adage “Sell in May and Go Away” is upon us once again. And if history repeats itself, stocks could be in for a rough spring and summer.
It can’t be denied: May is the start of a historically weak six-month period for the market.
But this strategy makes big profits even when stocks disappoint.
According to CNBC’s Bob Pisani:
“An investor putting $10,000 into the S&P 500 between May 1 and Oct. 31, 1950 to the present would have $4,138, an astonishing loss of $5,862.
An investor putting $10,000 into the S&P 500 from Nov. 1 to April 20 over the same time period would have a gain of $2,836,350.
That is not a typo. We are talking about a gain of $2,836,350 [for Nov. 1-April 20], versus a loss of $5,862 [for May 1-Oct. 31].”
But I have an easy and profitable solution for the six-month slump.
Some asset managers recommend moving assets from stocks, ETFs or mutual funds to cash or bonds during the Sell in May period. The switching strategy might be a great alternative for a retirement account where long-term wealth-building is the goal. Plus, you have the added peace of mind that your nest egg is safely stashed during the summer months.
And while I do agree that this is a sound strategy for the nest egg portion of your portfolio, as an income investor I’m not inclined to take a passive approach with my entire portfolio. I want to safely generate steady income even during Sell in May. And I do so using a calculated, statistical approach.
During last year’s “six worst months” I successfully brought in income 12 out of 14 times for an average return on capital of 10% every time I made a trade. I used an assortment of blue-chip stocks such as Disney (NYSE: DIS), Starbucks (NASDAQ: SBUX) and United Parcel Service (NYSE: UPS) as the foundation to create that steady income.
Think about it: four trades . . . 10% income each and every time a trade was placed. Cumulative totals over the six months reached 140.6%.
The strategy allowed subscribers to reap over 19% in UPS, 27.4% in DIS and 17.6% in VISA.
Plus, the strategy is often safer than other approaches investors use in down markets. Keep this in mind as we move into the Sell in May and Go Away period.
It’s never too late to consider learning alternative investment strategies as a way to diversify your current portfolio so that you are better equipped in any market environment – bullish, bearish or neutral.
If you’re truly interested in safe, reliable income, you owe it to yourself to learn this reliable strategy that allows you to bring in income on a consistent basis, no matter what the market is doing, and even during the Sell in May period.
Click here to get started.
This Strategy Made 140.6% During ‘Sell in May and Go Away’
by Ian Wyatt